Tokyo Market: Exporters cheered by moves to curb yen

STOCKS may rise this week if the government indicates that Japan and other countries will intervene in the currency market to stem the yen's rise, which threatens exporters' earnings.

The yen plunged after finance minister Kiichi Miyazawa said that Japan had been discussing its currency's recent rise with the Group of Seven industrialised nations. The move helped the benchmark Nikkei 225 index to reverse earlier losses.

"The implications of currency moves cannot be ignored," said Paul Migliorato at Commerz Securities. "A lot of people are interested in buying blue chips, but only if the currency stabilises and doesn't show signs of going to 100."

The Nikkei 225 fluctuated last week from a high of 17,988.59 to a low of 17,058.13, finishing on Friday at 17,342.27 - a 2 per cent decline in the week. The Jasdaq over-the-counter market slumped 8.4 per cent in three days, ending a 16-day, 25.3 per cent rally.

The yen rose as much as 1.94 per cent in the week to 103.2 to the dollar, a 40-month high against the US currency. The yen recently traded at 106.76, close to where it was at the beginning of the week.

There has been speculation that the US has asked Japan to increase its money supply through lower short-term interest rates before it co-operates with Japan to weaken the yen. "The direct impact of an intervention on bonds isn't straightforward, said Takeshi Naito, economist at Daiwa Securities. "A weaker yen is bad for Japanese government bonds, but the central bank may be forced to pump more funds into the banking system, which ultimately could be good for bonds." Last week the benchmark 10-year government bond yield fell nine basis points to 1.705 per cent.

Expectations that other nations may help Japan stem the rising yen helped reverse losses on Friday by the Nikkei, which ended the day up for the first time in three days, boosted by gains in Canon and other exporters.

Mr Miyazawa may discuss intervention at the G7 meeting, which begins on 25 September. Japan's deputy finance minister for international affairs, Haruhiko Kuroda, flew to Washington on Thursday to meet US Treasury officials.

"The actions by Kuroda and comments by Miyazawa have increased the likelihood of concerted intervention in the foreign exchange markets," said Hiromasa Hirai at Ikeda Investment Management.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?